Tapulous exec rift sign of bigger question

If TV or social networks are the model, entertainment apps will dominate mobile utility

What will iPhone users want more of -- entertainment or utility?

That seems to have been the question that led to the ouster of Mike Lee, co-founder and chief software architect of Tapulous.

In a statement, Lee said he voiced concerns of his design and engineering team over the direction of the company's development as a matter of honor. For that, he was shown the door.

The timing is unexpected, because Tapulous has had big early success with its music game, TapTap Revenge. The app has been downloaded from the iPhone store more than 1 million times

CEO Bart Decrem told us earlier this month that the company is beginning to roll out advertising and expects to reach break-even cash flow by year's end.

The company has another app, the Twitter client Twinkle, and has been developing a third one called FriendBook, which allows iPhone users to share contacts with a wireless sync. FriendBook is not listed in the iPhone store, and Decrem told TechCrunch it had been having problems.

The different trajectories of FriendBook and TapTap Revenge suggest that the rift that led to Lee's departure was over whether to put more resources into FriendBook or TapTap Revenge.

Based on what Decrem told us, he has big plans for the game. The company is going to bring out premium versions with hit songs and within a month will add a feature so two people can play each other over the Internet.

If you think about the different ways app developers will be able to monetize their work on a mobile platform, games seem to hold the most promise.

First off, good games are addictive, which means more ads will be served each time users play. A utility, on the other hand, is most likely to be paid for just once -- when it is downloaded. While you can sell ads next to it, mobile users are more likely to find them irritating than game ads.

When you're trying to get work done, you don't want to be bothered. When you're gaming, on the other hand, users have come to expect to get hit with ads.

Given how large the entertainment industry looms in the lives of consumers, it's no surprise that the majority of most-popular apps on Facebook are for fun, rather than utility.

Both online and off, people spend  more time doing fun things than things they have to do.

Given the early list of most-popular iPhone apps, it's easy to argue that the platform will develop the same way.

There will be some great opportunities for utility apps, as Rich Wong said recently, especially for ones that help  connect people to their friends or others around them, using location-based services.

But the biggest money will most likely come from entertainment-related development. It's not 100 percent certain, of course, but Decrem clearly thinks so.

If most of the folks that Mike Lee brought in to Tapulous don't agree, we may see more of their engineers and designers follow him out the door.

(Image source: JustanotheriPhoneblog)